EUR/GBP entered a tumbling mode this week, after hitting resistance at 0.8700 on Friday. On Monday, the rate fell sharply, breaking below the key support (now turned into resistance) zone between 0.8614 and 0.8623, and although it rebounded on Tuesday, the recovery was limited near that zone, from where the bears regained control and pushed the action back down. All that paints a negative technical picture in our view.
Today, the rate fell below yesterday’s low of 0.8581, a move that may have opened the way towards the 0.8556 barrier, marked as a support by the inside swing high of March 30th. A break below that support may extend the fall towards the 0.8534 or 0.8520 hurdles, where another dip could see scope for extensions towards the low of April 6th, at 0.8485.
Shifting attention to our short-term oscillators, we see that the RSI has just touched its toe below the 30 line, while the MACD remains below both its zero and trigger lines, pointing somewhat lower. Both indicators detect strong downside speed and support the notion for this exchange rate to continue drifting south for a while more.
Now, in order to abandon the bearish case and start examining whether the bulls have woken up, we would like to see a recovery back above the aforementioned key area between 0.8614 and 0.8623. Such a move may allow advances towards the 0.8665 obstacle, marked by the inside swing low of May 7th, the break of which could set the stage for the 0.8700 territory, which prevented the rate from moving higher on May 6th and 7th.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.
75.05% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure: https://www.jfdbank.com/en/legal/risk-disclosure